Assume that Clark Electronics has a monopoly in the production and sale of a new device for detecting and destroying a computer virus. Clark Electronics currently incurs short-run losses, but it continues to operate.
a. What must be true for Clark to continue to operate in the short run?
b. Draw a correctly labeled graph, and show each of the following for Clark.
i. The profit-maximizing price and output
ii. Area of loss
C. Assume Clark is maximizing profit. What will happen to its total revenue if Clark raises its price? Explain.
d. If demand for the new device increases, explain what will happen to each of the following in the short run.
i. Profit-maximizing output
ii. Total cost
Answers
Solution :
c. MC=MR is the profit maximizing equilibrium point. The price rise beyond that is likely to raise the total revenue. But the total cost might increase equally or more then that to nullify or decrease the profit.
d. (i). The demand increase implies that the AR (demand) curve shifts rightwards. This will increase the equilibrium price.
(ii). Change in demand does not affect the total cost.
a. Monopoly might continue to produce in short earn even if its AR < AC. It continues to do so until shut down point. It refers that production continued until average revenue (AR) is greater than equal to the average variable cost (AVC). The monopoly is a market with a single seller.
This market's average revenue (AR) demand curve is above its marginal curve . The curves are downward sloping, illustrating price demand inverse relationship.
Equilibrium quantity : when the marginal revenue = marginal cost
Equilibrium price : equilibrium quantity corresponding price at AR (demand ) curve.
Related Questions
Why should a notary signing agent learn all about the closing documents in a loan package if they are not allowed to provide advice or counsel?
Answers
Answer:In American law, a signing agent or courtesy signer is an agent whose function is to obtain a formal signature of an appearer to a document. In common parlance, most jurisdictions require the appearer to sign before a notary public. From this, the practice of a notary public designating themselves as a signing agent has arisen. There are notaries public who specialize in the notarization of real estate transfer and loan document signings. Signing agents often have certification and training through private organizations, but is not a requirement in law, although it may be a requirement of the lender in the oversight of real estate transaction document signatures.
Explanation:
A notary signing agent learns all about the closing documents in a loan package if they are not allowed to provide advice or counsel :
A marking specialist or kindness endorser is an specialist whose work is to get a formal signature of an showed up to an archive. In common speech, most wards require the showed up to sign some time recently a public accountant public. They will be able to let the borrower know where to put his signature and other beginning lines the borrowers ought to fill. Also, to know when to coordinate the borrower to the credit officer or other designated agents when necessary. It is concluded that the Public accountant Marking Operator isn't permitted to guide the borrowers, but as it were to guarantee they sign the papers appropriately.Learn more :
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Variety spice of life
Answers
Firm C’s demand for a product is 60 units per month. Its supplier charges an ordering cost of $40 per order and $35 per unit with a 20% discount for orders of 100 units or more. Firm C incurs a 20% annual holding cost. Calculate the economic order quantity without the discount. Then calculate the economic order quantity with the discounted price. What will be the change in Firm C’s annual total cost (purchasing, holding, and ordering) if it decides to take advantage of the quantity discount?
Answers
Answer:
$5,107.04
Explanation:
The computation of the change in the annual total cost is shown below;
Without a discount, the annual total cost is
The computation of the economic order quantity is shown below:
[tex]= \sqrt{\frac{2\times \text{Annual demand}\times \text{Ordering cost}}{\text{Carrying cost}}}[/tex]
[tex]= \sqrt{\frac{2\times \text{720}\times \text{\$40}}{\text{\$7}}}[/tex]
= 91 units
The annual demand is
= 60 × 12 months
= 720
And, the carrying cost is
= $35 × 20%
= $7
Now The computation of the total cost is shown below:
= Purchase cost + ordering cost + carrying cost
where,
Purchase cost = Annual consumption × Cost per unit
= 720 × $35
= $25,200
Ordering cost = (Annual demand ÷ EOQ) × Cost to place one order
= (720 ÷ 91) × $40
= $316.48
Carrying cost = (EOQ ÷ 2) × carrying cost percentage × Cost per unit
= (91 ÷ 2) × 7
= $318.50
Now put these values to the above formula
So, the value would equal to
= $25,200 + $316.48 + $318.50
= $25,834.98
Now if we take the economic order be 101
So, the total cost would be
= Purchase cost + ordering cost + carrying cost
where,
Purchase cost = Annual consumption × Cost per unit
= 720 × $35 × (1 - 0.20)
= $20,160
Ordering cost = (Annual demand ÷ EOQ) × Cost to place one order
= (720 ÷ 101) × $40
= $285.14
Carrying cost = (EOQ ÷ 2) × carrying cost percentage × Cost per unit
= (101 ÷ 2) × 7 × (1 - 0.20)
= $282.80
Now put these values to the above formula
So, the value would equal to
= $20,160 + $285.14 + $282.80
= $20,727.94
Now the change in the annual total cost is
= $25,834.98 - $20,727.94
= $5,107.04
A debt is an amount of money that is owed to a bank, a credit card company, a store, or another individual.
O True
O False
Answers
true <3
;DDDDDDDDDDDDDDDDDDDD
The answer is True .
It is true because the definition of debt is the state of owing money .
Shale Remodeling uses time and materials pricing. It is setting prices for next year using the following information: Labor rate, including fringe benefits $ 86 per hour Annual labor hours 3,100 hours Annual materials purchase $ 1,316,250 Materials purchasing, handling, and storage $ 315,900 Overhead for depreciation, taxes, insurance, etc. $ 780,000 Target profit margin for both labor and materials 25 % What should Shale set as the materials markup per dollar of materials used
Answers
Answer:
49%
Explanation:
Material mark up per dollar of material used = Target profit + Percentage of material purchasing , handling and storage
Material mark up per dollar of material used = 25% + (315,900/1,316,250 *100)
Material mark up per dollar of material used = 25% + 24%
Material mark up per dollar of material used = 49%
A company expects a shortage of raw materials required for production. What kind of factor is influencing its buying decision?
A.
individual
B.
interpersonal
C.
environmental
D.
organizational
Answers
Answer:
C.) Enviromental
Explanation:
Got this right on plato
Answer:
C
Explanation: I got it right on edmentum
On December 31 of the current year, the unadjusted trial balance of a company using the percent of receivables method to estimate bad debt included the following: Accounts Receivable, debit balance of $98,900; Allowance for Doubtful Accounts, credit balance of $1,131. What amount should be debited to Bad Debts Expense, assuming 4% of outstanding accounts receivable at the end of the current year are estimated to be uncollectible
Answers
Answer:
the bad debt expense is $2,825
Explanation:
The computation of bad debt expense is shown below:
= Debit balance of account receivable × given percentage - credit balance of allowance for doubtful debts
= $98,900 × 4% - $1,131
= $3,956 - $1,131
= $2,825
Hence, the bad debt expense is $2,825
We simply applied the above formula so that the correct value could come
And, the same is to be considered
Data for January for Bondi Corporation and its two major business segments, North and South, appear below:
Sales revenues, North $ 548,000
Variable expenses, North $ 318,000
Traceable fixed expenses, Nort $ 65,600
Sales revenues, South $ 423,500
Variable expenses, South $ 241,600
Traceable fixed expenses, South $ 54,800
In addition, common fixed expenses totaled $148,600 and were allocated as follows: $77,200 to the North business segment and $71,400 to the South business segment.
A properly constructed segmented income statement in a contribution format would show that the segment margin of the North business segment is:
a. $87,200
b. $318,000
c. $164,400
d. $152,800
Answers
Answer:
Segment margin North= $164,400
Explanation:
Giving the following information:
Sales revenues= $548,000
Variable expenses= $318,000
Traceable fixed expenses= $65,600
To calculate the segment margin for the North division, we need to use the following formula:
Segment margin North= segment contribution margin - traceable fixed expense
Segment margin North= (548,000 - 318,000) - 65,600
Segment margin North= $164,400
The following note transactions occurred during the year for Towell Company: Nov. 25 Towell issued a 90-day, 10% note payable for $80,000 to Hyatt Company for merchandise. Dec. 7 Towell signed a 120-day, 9% note at the bank for $120,000. Dec. 22 Towell gave Barr, Inc., a 60-day, 9%, $120,000 note for payment of account. Prepare the general journal entries necessary to adjust the interest accounts at December 31. Use 360 days for calculations and round to the nearest dollar.
Answers
Answer:
Towell Company
Journal Entries:
Debit Interest Expense $1,790
Credit Interest Payable $1,790
To record the interest expense for the year.
Explanation:
a) Data and Calculations:
i) Nov. 25: Issue of 90-day, 10% Note Payable = $80,000
Interest on the note for the year = $80,000 * 10% * 36/360 = $800
ii) Dec. 7: Issue of 120-day, 9% Note Payable = $120,000
Interest on the note for the year = $120,000 * 9% * 24/360 = $720
iii) Dec. 22: Issue of 60-day, 9% Note Payable = $120,000
Interest on the note for the year = $120,000 * 9% * 9/360 = $270
Total interest payable for the year = $1,790
Have you ever had your dream crushed before
Answers
Answer:
yes but dont let it slip away
Explanation:
Suppose the Digby company expands to other markets with good designs, high awareness and easy accessibility, what strategy would they be implementing?
A- Niche cost leader
B- Niche differentiation
C- Broad cost leader
D- Broad differentiation
Answers
Answer:
D- Broad differentiation
Explanation:
Differentiation strategies are useful if buyers needs and preferences are too diverse, one can be fully satisfied by standardizing product offering.
A broad differentiation strategy is simply the competitive approach used when buyers' needs and preferences are too different or large to be satisfied by a product that is importantly identical from one seller to the other seller.
is fulfilled if a big scope of buyers find the company's offering more enticing than that of rivals and worth a somewhat higher price. It makes profitability to increase if the higher price the product commands exceeds the added costs of achieving the differentiation.
Mr. Dealer bought a fleet of SUVs (sport utility vehicles) from General Motors (GM) on credit, GM agreeing not to assign the resulting account receivable without Dealer's consent. GM later, without debtor dealer's consent, assigned the account to The Bank of New York (BNY) for consideration. Dealer made payments to BNY, but claimed damages from GM for breach of contract. 1. Could Dealer collect damages from GM
Answers
Answer:
Yes, Dealer could collect damages from GM because basically GM breached the contract. Any time a contract is breached, the non-breaching party can sue. But the real question here is what amount could the court assign to Dealer as compensation for damages incurred. If you want to rephrase this question, it would be: What damages did Dealer suffer due to GM's breach.
If the damages are not significant, then the court will probably assign some amount for nominal damages. To be honest, the greatest expenses here are actually the legal costs of the lawsuit. Unless Dealer can prove that assigning the contract actually hurt them (which I doubt), then the court will assign a small amount. Sometimes nominal damages can be very small and mostly symbolic, e.g. $1.
The Dealer could not collect damages from GM because he did not suffer any harm from the assignment of the account receivable.
The Dealer could have refused to pay the Bank of New York and claimed a breach of contract against GM Motors. But it was not a material breach.
Secondly, the sales agreement with GM Motors only required the debtor dealer's consent before the assignment. It did not forbid GM Motors from assigning the account. It does not seem that any penalty was agreed upon for breach of this clause.
Thus, the Debtor Dealer could not collect damages from GM Motors because he cannot substantially prove that GM's action put him in financial loss.
Learn more: https://brainly.com/question/12790234 and https://brainly.com/question/24991312
The financial statements for People’s National Bank (PNB) are shown below:
Peoples’ National Bank
Balance Sheet
As of December 31, 20XX
Assets Liabilities & Equity
Cash 600 Demand deposits 5,590
Demand Deposits from other FIs 1,890 Small time deposits 9,867
Investment 3,680 Jumbo CDs 3,198
Federal funds sold 1,988 Federal funds purchased 2,500
Loans 16,145 Equity 3,728
Reserve for loan losses (1,040)
Premises 1,620
Total Assets 24,883 Total Liabilities and Equity 24,883
Peoples’ National Bank
Income Statement
For the Year Ended December 31, 20XX
Interest on fees and loan 1,200
Interest on investment securities 700
Interest on repurchase agreement 780
Interest on deposits in banks 265
Total Interest Income 2,945
Interest on deposits 945
Interest on debentures 689
Total Interest Expense 1,634
Provision for loan losses 140
Noninterest income 185
Noninterest expense 281
Total 236
Income before taxes 1,075
Taxes 215
Net Income 860
Analyze the following eight ratios for PNB’s financial statements:
Earning Assets, Return on Assets, Total Operating Income, Asset Utilization, Net Interest Margin, Spread, Overhead Efficiency, and Tax Ratios.
Answers
Answer:
Earning Assets ratio = Earning Assets/Total assets
Total asset = 24,883: Earning Assets = 1890 + 3680 + 1988 + 16145 = 23703
Earning Assets ratio = 23703 / 24,883
Earning Assets ratio = 0.9525781
Earning Assets ratio = 95.25%
Return on Assets = Net income / Total assets
Return on Assets = 860 / 24,883
Return on Assets = 0.034561748985251
Return on Assets = 3.456%
Total Operating Income = Operating income / Interest income
Total Operating Income = 1075 / 2945
Total Operating Income = 0.365025467
Total Operating Income = 36.50%
Net Interest Margin = (Interest income - Interest expenses) / Average earnin asset
Net Interest Margin = (2,945-1,634) / 23,703
Net Interest Margin = 1,311 / 23,703
Net Interest Margin = 0.0553094544994305
Net Interest Margin = 5.53%
Assets utilization ratio = Revenue / Total assets
Assets utilization ratio = 2,945 / 24,883
Assets utilization ratio = 0.1183538962343769
Assets utilization ratio = 11.84%
Overhead efficiency ratio = 281 / 3,130
Overhead efficiency ratio = 0.089776357827476
Overhead efficiency ratio = 8.98%
Tax ratio = Tax expenses / Income
Tax ratio = 215 / 1,075
Tax ratio = 0.2
Tax ratio = 20%
A suggested project requires initial fixed assets of $227,000, has a life of 4 years, and has no salvage value. Assume depreciation is straight-line to zero over the life of the project. Sales are projected at 51,000 units per year, the price per unit is $47, variable cost per unit is $23, and fixed costs are $842,900 per year. The tax rate is 23 percent and the required return is 11.5 percent. Ignore taxes. What is the DOL at the base-case output level of 51,000 units
Answers
Answer:
The answer is "11.4".
Explanation:
Please find the complete question in the attached file.
The point of breakthrough financial:
[tex]\to \frac{ ( \frac{(227000 \times 11.5 \%}{( \frac{1-1}{1.115^4})}-\frac{227000}{4})}{\frac{(1-23 \%)+842900+ \frac{227000}{4})}{(47-23)}}\\\\\\\to \frac{ ( \frac{(26,105}{( \frac{0}{1.5456084})}-56,750)}{\frac{(0.77)+842900+56,750)}{(24)}}[/tex]
[tex]\to 38416.19\\\\\to DOL= \frac{38416.19 \times (47-23)}{(38416.19 \times (47-23)-842900)} \\\\[/tex]
[tex]=11.4[/tex]
How is environmental pollution market failure
Answers
Answer:
In the real world, pollution is served as an example of market failure. ... According to the diagram, in this case pollution, negative externalities occurs. At the output Qe , equilibrium output is achieved by the firm, at which the marginal private cost equals the price of the firm's output.
Consider the following financial statements about DANIEL Co. for the current year 2015
I/S for the year ended Dec. 31, 2015
Sales $16,000
CGS 10,000
Operating expenses 4,000
Profit from operations (EBIT) 2,000
Interest expense 200
EBT 1,800
Tax expense 600
NI $ 1,200
Additional information:
Operating expenses include $150 of depreciation expense and a $200 impairment loss on equipment.
A/R increased by $380
Inventory decreased by $100
Prepaid expenses related to operating expense increased by $80
A/P decreased by $360
Accrued liabilities related to operating expenses decreased by $180
Interest payable decreased by $20
Unearned revenue received from customers decreased by $34
Income tax payable increased by $40
Required:
Prepare CFO section of the cash flow statement under the (a) DIRECT (12 marks);
and (b) INDIRECT methods (8 marks)
Answers
Answer:
a. For the Year Ended December 31, 2015
Cash flows from operating activities:
Cash received from customers 15586
Cash paid to suppliers -10260
Cash paid for operating expenses -3910
Cash paid for interest -220
Cash paid for income taxes -560
Net cash flow from operating activities 636
Working:
Sales 16000
Less: Increase in accounts receivable -380
Less: Decrease in unearned revenue -34
Cash received from customers 15586
Cost of goods sold 10000
Add: Decrease in accounts payable 360
Less: Decrease in inventory -100
Cash paid to suppliers 10260
Operating expenses 4000
Less: Noncash expenses
Depreciation expense -150
Impairment loss -200
Cash operating expenses 3650
Add: Increase in prepaid expenses 80
Add: Decrease in accrued liabilities 180
Cash paid for operating expenses 3910
Interest expense 200
Add: Decrease in interest payable 20
Cash paid for interest 220
Income tax expense 600
Less: Increase in income tax payable -40
Cash paid for income taxes 560
(b) Partial Cash Flow Statement (Indirect Method)
For the Year Ended December 31, 2015
Cash flows from operating activities
Net income 1200
Adjustments to reconcile net
income to operating cash flows:
Depreciation expense 150
Impairment loss 200
Increase in accounts receivable -380
Decrease in inventory 100
Increase in prepaid expenses -80
Decrease in accounts payable -360
Decrease in accrued liabilities -180
Decrease in interest payable -20
Decrease in unearned revenue -34
Increase in income tax payable 40 -564
Net cash flow from operating activities 636
"Political risk is the possibility that political events in a particular country will influence the economic well-being of a firm operating in that country. Multinational firms need to anticipate and manage political risk. In order to do that, the firm must understand the differing types of risks and their likelihood of occurrence. The political risks facing a multinational firm can be categorized as"
Answers
Answer:
macro risk and micro risk.
Explanation:
Political risks are crucial factors for a multinational company to make investments in a given country, due to the instability of the country's political scenario that can bring negative adverse effects to the company in a context of macro risk and micro risk.
Macro risk is that which is inherent in the country and affects all economic sectors equally, such as the risk of government expropriation.
Micro risk, on the other hand, is one that will impact only a specific business sector, such as corruptions that aim to defraud or harm an organization.
The important point(s) to remember while estimating the cash flows of a project Group of answer choices is that only cash flow is relevant are cash flow is relevant and always estimate cash flows on an incremental basis are to always estimate cash flows on an incremental basis and to be consistent in the treatment of inflation. are cash flow is relevant, always estimate cash flows on an incremental basis, and be consistent in the treatment of inflation.
Answers
Answer:
Option D (are cash..........inflation) is the right alternative.
Explanation:
Even before forecasting or considering a project's investment returns, this same important thing to recognize or significant observation is capital investment. Quite often approximate cash flows as well as being consistent throughout the cure of economic growth around an integrated or incremental perspective.Some other alternatives given are not linked to the scenario in question. That is indeed the right choice, therefore.
The process for applying for a work permit at the Manchester department of labor is as follows. First, the administrator fills out an application (5 minutes) and takes a picture (1 minute). Then, a clerk enters the information and processes the permit (5 minutes). There are two administrators and three clerks. If the number of licenses per hour for the administrators is 16 and the number of licenses per hour for the clerks is 20.57, what is the hourly service rate for administrators
Answers
Answer:
the hourly service rate is 10
Explanation:
The computation of the hourly service rate for the administrator is shown below:
= total minutes for filling out the application by an administrator × number of administrator
= 5 minutes × 2 administrator
= 10
Hence, the hourly service rate is 10
We simply applied the above formula so that the correct value could come
And, the same is to be considered
A delivery company is considering adding another vehicle to its delivery fleet; each vehicle is rented for $250 per day. Assume that the additional vehicle would be capable of delivering 1,750 packages per day and that each package that is delivered brings in $0.25 in revenue. Also assume that adding the delivery vehicle would not affect any other costs. Instructions: Round your answers to 1 decimal place. a. What are the MRP and MRC
Answers
Answer: See explanation
Explanation:
Based on the information that has been given in the question, the MRP will be calculated as the multiplication of the total packages that was delivered by the revenue that was gotten from one package. This will be:
MRP = 1750 × 0.25
= $437.5
The MRC based on the question = $250
Based on the above, a profit of $187.5 ($437.5 - $250) will be earned.
Suppose the credit terms offered to your firm by its suppliers are 2/10, net 30 days. Your firm is not taking discounts, but is paying after 22 days instead of Day 30. You point out that the nominal cost of not taking the discount and paying on Day 30 is approximately 37%. But since your firm is neither taking discounts nor paying on the due date, what is the effective annual percentage cost (not the nominal cost) of its costly trade credit, using a 365-day year
Answers
Answer: 63.5%
Explanation:
Assuming 365 days, the effective annual percentage cost is;
= ( 1 + 2%/(100% - 2%) ) ^ ( 365 / (25 - 10 days) ) -1
= 1.634928727 - 1
= 0.6349
= 63.5%
Which item will appear on the credit side of ledger account?
a. Cash recived from a customer.
b. Services performed to a customer.
c. Purchases.
d. Rent Expanses.
Answers
I just looked it up and I think that it is a
The item that should appear on the credit side of the ledger account is the service performed to the customer.
The following information should be relevant:
The assets, expenses, and dividend account should always have the debit balance. The liabilities, revenues, and the stockholder equity contain the credit balance.Also, the purchase should have a debit balance.Therefore we can conclude that the item that should appear on the credit side of the ledger account is the service performed to the customer.
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During her womanhood ceremony, Dasheena Cochise spends 4 days being tested and ultimately being renamed and remade as a member of her community. Which of the following is not true of this ceremony
A. it is a rite of passage
B. it reproduces a social order
C. it translates beliefs into action
D. it communicates values through symbols
E. it affirms sacred cycles (including life cycles)
F. it is essentially about the individual rather than the community
Answers
Answer:
The statement that is not true of this ceremony is:
F. it is essentially about the individual rather than the community
Explanation:
The focus of this communal rite of passage is not the individual but the community because during the rite, the sense of the individual is replaced by the sense of the community. It instils in the initiates a sense that they are no longer individuals but members of the community with some rights and privileges. Community values are communicated through a sophisticated system of beliefs and practices that affirm sacred cycles.
Can we get this to 20 Answers?
Answers
Answer:
what is your question ? tell me in the comments plz
Explanation:
ok but seriously don't click on the site in the comments...unless you want to
Answers
Answer:
Thanks?
Explanation:
Eaglet Corporation has the following target and costs associated with its capital structure. Based on these parameters what is Eaglet Corporations weighted average cost of capital?
Target common equity weight: 80 percent
Target debt weight: 20 percent
Cost of equity: 15 percent
Cost of debt: 5 percent
Tax rate: 35 percent
A) WACC = 12.65 percent
B) WACC = 8.45 percent
C) WACC = 13.00 percent
Answers
Answer: A) WACC = 12.65 percent
Explanation:
WACC = (Cost of equity * weight of equity) + (weight of debt * cost of debt * (1 - tax rate)
= (0.15 * 0.8) + (0.2 * 0.05 * (1 - 0.35))
= 0.12 + 0.0065
= 12.65%
Recording Cash Discounts Schrand Corporation purchases materials from a supplier that offers credit terms of 2/15, n/60. It purchased $12,500 of merchandise inventory from that supplier on January 20, 2019. Required a. Assume that Schrand Corporation paid the invoice on February 15, 2019. Prepare journal entries to record the purchase of this inventory and the cash payment to the supplier using the net-of-discount method.
Answers
Answer:
Schrand Corporation
Journal Entries:
January 20, 2019:
Debit Inventory $12,500
Credit Accounts Payable $12,250
Credit Purchase Discounts $250
To record the purchase of inventory on credit terms, 2/15, n/60.
February 15,. 2019:
Debit Discount Lost Expense $250
Credit Accounts Payable $250
To record the loss of discount following late payment.
Debit Accounts Payable $12,500
Credit Cash Account $12,500
To record the payment for purchase.
Explanation:
a) Data and Calculations:
Inventory purchase on January 20, 2019 = $12,500
Credit terms = 2/15, n/60
Net-of-discount purchase = $12,250 ($12,500 - 250)
Payment of invoice on February 15, 2019 = $12,500
b) The difference between the net and gross discount methods is that under the gross discount method, the purchases and Accounts Payable are initially recorded at full value. On the other hand, under the net discount method, the purchases and Accounts Payable are initially recorded at a reduced value.
Baskin-Robbins is one of the world’s largest specialty ice cream shops. The company offers dozens of different flavors, from Very Berry Strawberry to lowfat Espresso ’n Cream. Assume that a local Baskin-Robbins in Raleigh, North Carolina, has the following amounts for the month of July 2021.Salaries expense $13,700 Sales revenue $69,800Inventory (July 1, 2021) 2,300 Interest income 3,300Sales returns 1,100 Cost of goods sold 28,700Utilities expense 3,600 Rent expense 6,700Income tax expense 6,000 Interest expense 400 Inventory (July 31, 2021) 1,100Required:1. Prepare a multiple-step income statement for the month ended July 31, 2021.2. Calculate the inventory turnover ratio for the month of July. Would you expect this ratio to be higher or lower in December 2021? Explain.3. Calculate the gross profit ratio for the month of July.
Answers
Answer:
Baskin-Robbins
Raleigh, North Carolina
1. Multi-step Income Statement for the month ended July 31, 2021:
Net Sales Revenue $68,700
Cost of goods sold 28,700
Gross profit $40,000
Expenses:
Salaries $13,700
Rent expense 6,700 20,400
Operating income $19,600
Interest Income $3,300
Interest expense ($400)
Income before tax $22,500
Income tax expense 6,000
Net income $16,500
2. Inventory turnover ratio = Cost of goods sold/Average Inventory
= $28,700/$1,700 = 16.88 times
3. I expect the inventory turnover ratio for Baskin-Robbin's shops at Raleigh to be higher in December 2021. There will be more sales of the different flavors of ice cream in December because of the Christmas holidays. As a result, the cost of goods sold will be higher than July's, and the ending inventory will be lower still than July's.
4. Gross profit ratio = Gross profit/Net Sales * 100
= $40,000/$68,700 * 100
= 58%
Explanation:
a) Data and Calculations:
Expenses:
Salaries $13,700
Rent expense $6,700
Interest expense $400
Interest Income $3,300
Sales Revenue $69,800
Sales returns 1,100
Net Sales Revenue $68,700
Income tax expense 6,000
Cost of goods sold = $28,700
Inventory, July 1, 2021 $2,300
Inventory, July 31, 2021 $1,100
Total inventory $3,400
Average inventory $1,700 ($3,400/2)
Financial well-being refers to a person that (check all that apply) *
Answers
How does a subsidy provided for a good affect consumers?
A
It protects consumers from an unsafe good.
B
It lowers prices for the good but may reduce choice.
C
It decreases supply of the good, so consumers pay more for it.
D
It increases consumers’ incomes and encourages consumers to buy the good.
Answers
Answer: D. It increases consumers’ incomes and encourages consumers to buy the good
Explanation:
A subsidy is an amount of money that is given by the government to producers or farmers so as to increase the production of a particular good and also to reduce the price of the good.
Subsidies affect consumers as it increases consumers’ incomes and encourages consumers to buy the good. This is because the subsidized goods will be sold at a cheaper price which means that the income of the consumer is increased and also encourages more purchases of the good.